Investing is about making a profit. We invest money on something hoping to make money out of it. While we do make money out of many decisions , some decisions could go horribly wrong. For a variety of reasons, we could end up with an outcome which is hardly what we hoped for.

When was the last time you made a loss in the stock market ? And, how did you deal with it ? Investors hate losses. Losses damage our self-esteem besides leaving us poorer. While the loss of money is accepted easily, the difficult part is to deal with our loss of self-esteem and self-worth. Investors either recover from a loss or become reclusive after making one.

Why should we deal with loss ? How should we deal with loss ? Should we forget our mistakes or remember them ? How do we recover from them ?

Losses are inescapable. There is hardly anyone who never made a loss. Accepting that a loss can happen to anyone is the prerequisite for us to avoid future losses. We need to understand why we made a loss and how we can avoid making the same mistakes in future. To understand the above , we must learn to deal with loss.

Let us understand how investors try to recover from losses . We mostly try hard to forget about a loss as soon as we can. We try and put it behind us. But, when we do so , we actually forget the mistakes done earlier and tend to repeat them. Forgetting a mistake is by itself not easy. But, the question to be asked of ourselves is significant. Should we really forget our mistakes ? What happens when we forget our mistakes ?

Let us study a situation which could have happened to any of us. A common way in which people make a loss in the stock markets is by taking positions in the futures segment without adequate margin money to put up if the stocks dip. Therefore , when the stock prices fall, the brokers ask for more margin and inevitably close our position if we cant put the money on the table. Investors mostly do not altogether stop trading in the futures segment after making a big loss. Instead, they spend sometime away from trading when they recoup enough money before they set forth again to trade in the futures segment. Inevitably, they repeat the same mistake again. Trading without adequate liquidity to meet future margin needs is a typical mistake which investor repetitively commit. So forgetting about a loss is not good for investors as it merely helps to superficially overcome the hurt .

Forgetting a mistake will inevitably lead to its recurrence. Remembering them is a sure way of keeping ourselves aware of how we went wrong . By remembering our follies , we can relate our present circumstances and decisions to our past follies. Our mind will alert us whenever we are moving towards the same symptoms or transactions methods that landed us in losses. We can proactively avoid the mistakes by steering clear of decisions which look very similar to our loss making ones.

How do we deal with losses which are temporary or notional ? When do we face such situations ?

Dealing with notional losses is very important as notional losses could turn into profits within reasonable periods of time. We often face such situations when we bought a stock when the markets were trading near the highs and subsequently both the markets and the specific scrip fell as part of an overall trend. The fundamentals of the company could still be very favorable for strong future performance and the price drop could well be temporary. If we do not show enough conviction during such testing times , we may end up turning our notional, temporary losses into real , permanent losses.

When we do make a notional loss in an investment , we need to evaluate the circumstances closely and decide if the company’s share price will recoup in the near/ long term. This will help us understand if the drop in price was actually temporary in nature. If we are convinced about the future potential , we can even use the opportunity to buy more. Alternately if we do not do enough homework , we may end up selling the stock . We will eventually end up buying and selling a good scrip at the wrong time. This is another common folly of investors which makes them hate the markets and shun them.

Samyuktha holds an undergraduate degree in Mathematics from Stella Maris College, Chennai. She has also completed Investment Advisory qualifications conducted by NISM (National Institute of Securities Markets). She began her career as an analyst with Goldman Sachs. She is an autodidact, and has spent the last few years acquiring knowledge on financial markets and financial planning.

Gayathri

Gayathri Muraly, a qualified Chartered Accountant, is part of ithought’s financial planning team. An All India rank holder in the CA final examination, she has worked with S.R. Batliboi & Associates (Member Firm of Ernst & Young Global), in their audit and assurance services segment. She has been a prolific achiever throughout her academic pursuits and career. She has a wealth of experience in Accounting, Audit and Finance across diverse industries. Her functional skills include understanding businesses and their financial statements. She has also worked on tax and risk management solutions for clients.

Prashanth

Prashanth studied business administration and data analytics in college. Having joined ithought’s financial planning team in 2015, he has three years of industry experience. He enjoys working with numbers and is passionate about simplifying client experience. Prashanth is also an ardent football fan and an aspiring marathon runner.

Gaurav

Gaurav Jain is a qualified chartered accountant and has more than five years of work experience in the accounting and finance industry. He completed his graduation from Loyola College, Chennai. After having worked with companies like KPMG, Goldman Sachs and Barclays, Gaurav decided to work with a full-fledged financial advisory firm and joined ithought in 2015. He heads ithought’s financial planning desk, longitude.

Vikash

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Rashmika

Rashmika graduated from Ethiraj College for Women with a Bachelor’s degree in Commerce. She is a conscientious and meticulous professional. Prior to working with ithought, Rashmika worked at Goldman Sachs.

Maruthi

Maruthi has an engineering degree in Electrical & Electronics from VIT University. His first position was with TCS Ltd where he worked as a developer for a leading UK Bank’s Investment Banking Division. He followed it up with PGDM from IIM Ahmedabad and worked in sales & business development roles for two years in Healthcare and Real Estate firms, before joining ithought in 2015. He is a dedicated relationship manager focused on improving client experience.

Anirudh

Anirudh is a relationship manager at ithought, specializing in business development and client management. He has been with ithought since 2012 and enjoys being a part of the growing business. He has a Master’s degree in Accounting & Finance from the London School of Economics. He never misses a game of basketball on the weekends.

Amit

Amit Parakh is an engineer by design and a personal financial services advisor by passion. He has a wealth of experience in the financial services industry. Amit has spent more than two decades working with banks, asset management companies (AMCs), and financial advisory firms. After having worked with HSBC, HDFC SLIC, and ICICI Prudential Mutual Fund on Sales Strategy, Product Communication, and Distribution, Amit was keen to transition to the client facing side and help clients through their financial journeys. His value systems in client service are closely aligned with ithought’s and he joined us in 2015.

Ajay Kumar

Ajay is a commerce graduate from Loyola College, Chennai and has been working as a relationship manager with ithought since 2010. During his time here, he has developed a keen interest in value investing and financial planning. He is known for his warmth and is committed to client service. Ajay is also a professional cricketer and is passionate about traveling.

Prasath

Prasath Raj has been with ithought from inception and has over twelve years of experience in financial markets. He is a Commerce Graduate with an MBA in Finance. He is also a derivatives specialist and has extensive knowledge on equity shares and mutual funds. Prasath is a voracious reader and leverages his extensive knowledgebase to provide unique insights. He utilizes these competencies to formulate sound investment strategies for our clients.

Niranjan

Niranjan is an applied Mathematics Graduate from the College of Engineering, Guindy. In addition, he has cleared the FRM (Financial Risk Manager) certification exam from GARP (Global Association Of Risk Professionals). Niranjan has an avid interest for financial markets and has been following equity markets since his school days. He has been an active investor for over sixteen years. Niranjan has been involved with strategy at ithought for over seven years now.